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1Mby1M Deal Radar 2011: Cellit, Chicago, Illinois

Posted on Monday, Aug 15th 2011

With the advent of smart phones, the mobile marketplace has grown by leaps and bounds. People send emails, make purchases, or update their Facebook statuses with their cell phones as much as if not more than they use them to make phone calls. Today’s consumers are  more mobile than ever before, and reaching them is an ongoing challenge for marketers.

Cellit is a $5 million, profitable mobile marketing platform provider based in  Chicago, Illinois, that allows companies to send text and multimedia messaging  service (MMS) messages to their customers. These mobile campaigns act as a  mobile customer relationship management (CRM) tool for retailers, restaurants  and other companies that want to leverage mobile technology to increase customer engagement.  Cellit’s Studio campaign management platform helps clients to create interactive mobile CRM programs including coupons, contests, games,  surveys, and alerts that inform, delight and motivate customers and increase  knowledge, loyalty, and spending. The company integrates with client enterprise and point-of-sale (POS) technology and provides an easy to implement, measurable way to maximize the potential of the mobile channel. Cellit’s client list includes IKEA, SUBWAY, Pizza Hut, and Zumiez. The company appeared on the Inc. 500 list of fastest growing companies in 2010.

Cellit’s founder and president, David Wachs, is a dual cum laude graduate of the University of Pennsylvania’s Jerome Fisher Program in Management and Technology. He holds a B.S. in economics from the Wharton School and a B.S.E. in computer science engineering from the School of Engineering.

When Wachs launched Cellit in 2002, mobile phones were just starting to go mainstream and text messaging wasn’t as ubiquitous as it is today. He launched the company with a focus on the real estate category, allowing agents to quickly send information to clients about properties via text. During the height of the real estate boom, Wachs saw an opportunity to leverage mobile technology to ease the home buying process. It was often difficult to get a realtor on the phone. Since homes moved quickly, it was important to collect information in real time to assist in the decision-making process. Cellit was the only company of its kind, at that time, with House4Cell. Soon, competition started forming with CellSigns, a product released by two realtors. Like most competition in the mobile space,  CellSigns’s founders did not understand the technology, Wachs said. They were just marketers.

After developing House4Cell, Wachs saw greater applicability to small businesses of all types and created CouponZap, a CRM platform targeted at small businesses. CouponZap morphed into Cellit Studio as it started being used by bigger businesses like Hearst Publishing for campaigns not related to couponing. Today Wachs’s text platform is used by large retail and restaurant companies and single location businesses as a way to attract business and increase loyalty.

Cellit separates itself apart from most competitors with its heavy  focus on engineering. All development is done in-house.  This has also been the case with Cellit Studio. Because the company develops its technology in-house, it can react to market or client demands faster and can integrate with clients quickly.

Outside of real estate, the company continues the trend of pragmatic innovation. While many marketers — and competitors — get wrapped up in the latest marketing fad, such as QR codes, Bluetooth “blasting” or “Take a picture of this ad for more info,” Cellit directs clients in the direction of ROI, an approach that has led to the company’s current strong client base and the results the clients see, such as coupon redemption rates eight times greater than their email redemption rates, extremely low subscriber churn, and strong subscriber growth rates.

Additionally, the Cellit control panel (Cellit Studio) was designed to be a “Swiss army knife” and not a template. The company believes that the competition’s system, such as SumoText, is easy to use at the outset but limiting in the long run.  While the learning curve for Cellit Studio is moderately steeper, the flexibility and utility is greater.  To assist customers with this higher learning curve, Cellit’s account managers come into play.

Besides providing a platform that is easy for clients to learn and use and works with current POS systems, Cellit has a platform (Cellit Studio) that was  developed to help clients implement any type of mobile CRM campaign in a single dashboard; Cellit Studio facilitates communication with customers and integrates with client back-end databases and point-of-sale systems. The company provides an end-to-end couponing solution, mobile coupon capabilities such as built-in Web-based redemption and offers retailers multiple ways to integrate with its POS system.

The mobile marketing industry is fragmented. There is currently consolidation, but larger competitors include Augme Technologies, which is slated to acquire HipCricket. Cellit sets itself apart with the Cellit Studio platform, which  is the most robust on the market today. It has the greatest flexibility, the deepest levels of reporting, and the strongest integration within backends, via APIs and message-based triggers, and POS integration (direct support for MICROS, POSitouch, Agilysys, and support for Windows-based systems through the company’s Widget, and support for handheld devices through the iWidget and Widget for Android.)

Cellit says its system is among the fastest out there, delivering 800 messages per second.  In addition to the speed of delivery, the company also boasts the widest range of carriers in the US and Canada, including Simmetry, Long Lines and i-Wireless.

Large retailers and restaurants are an obvious fit for mobile campaigns. They can use text to reach customers with special offers and track and monitor response rates via POS systems. Because the cost is volume based, text marketing provides an affordable way for small businesses to connect with customers, build loyalty and respond quickly to boost business. For example, on a snowy day, single location restaurants with a lull in business, can send out texts encouraging customers to brave the storm for special deals. Casinos are a growth area because they want to bring guests in and encourage repeat visits.

Most of Cellit’s 1,500 clients came from referrals or via Google search. Since its inception in 2002, Cellit has sent more than 135 million text messages on behalf of its clients. In an effort to generate more business, the company has four sales people who dial outbound; however, the results tend to come more from inbound leads than outbound.

Cellit Studio’s pricing is scalable and depends on the volume of text messages being sent. Depending on client needs, pricing runs from less than $,1000 per month (very small accounts start below $100) to over $3,000 per month.  The largest accounts, due to enormous message traffic volumes, are in the $30,000 per month range.

Wachs and his team are always looking to add capabilities to the mobile platform so that it is easier to use and works on all devices. The Cellit team is also looking to develop completely new platforms using mobile technology. The most recent development is a new mobile platform for bars, a trivia game that allows bar patrons to answer questions and play against each other using their mobile phones. It is a venture where the company sees plenty of opportunities.

Cellit is a bootstrapped company, raising money, in the beginning, solely from friends and family. Wachs and his team have no plans to seek either funding or an exit.

Recommended Reading:
Deal Radar 2009: SMS GupShup
Deal Radar 2008: Mobixell

This segment is a part in the series : 1Mby1M Deal Radar 2011

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